Raising minimum wage is economically and morally correct

By Bob Nakata 

POSTED: Apr 10, 2013

It's past time to shoulder the burden of a serious increase to the minimum wage. It has been more than six years since Hawaii increased its minimum wage — and workers in this highest cost-of-living state are living from hand to mouth. The truth is, things have been hard for a big part of the local population for a long time.

Many work two jobs, and even then it's hard to make ends meet. The growing crowd of homeless people, the steady pace of foreclosures and the crushing scarcity of time for family are all stations on a spectrum of economic insecurity that has been hanging over Hawaii for almost a decade.

What makes this particularly hard to take right now is the expanding economy that is all around us — the stock market is soaring, tourism is at the highest levels ever and house prices are rising rapidly.

At the lower end of the wage ladder things are hard and getting harder. More than 70,000 workers in Hawaii would see a raise if the minimum wage were increased to $9.25 per hour. More than 88 percent of these workers are adults over age 20, and a substantial share are struggling to support children at home.

For many people the minimum wage is at their second job — and sometimes even their third. The wage is low compared to its buying power when I was a young man in Hawaii. Then, the minimum equaled more than $10.60 per hour in today's dollars, but thanks to decades of inaction, the minimum wage today has lost much of its purchasing power as the cost of living has continued to rise.

Even the boldest proposals being considered at the Legislature today do not fully restore the lost value of the minimum wage. The House isn't even sure it wants to meet President Barack Obama's modest $9-an-hour proposal; it seems wedded to $8.75.

It's certainly true that the increase needs to be phased in over time, perhaps 18 months to two years to give small businesses time to adjust. But there is an urgency to this increase that does not appear to have reached every nook and cranny in the state Capitol yet. Our people need a fairer wage and they need it right away.

As the discussion continues, I have grave concerns about increasing the so-called tip credit as a part of this legislation. Tip credits allow businesses to pay workers less based on the assumption that the employees will make tips. Yet tips are an income stream that does not involve the employer — they are between the customer and the server, and are based on the quality of the service. It seems remarkably unfair to insert the employers into this dynamic by exempting them from wage laws.

Increasing the tip credit essentially allows the employer to reach into the pocket of the server and take some of their tips. Even worse, tipping does not occur across the board — in the visitor industry, a large percentage of tourists are from countries that do not tip, so hotel workers cannot rely on tips in the way that workers who serve local customers do.

The bottom line is our people are struggling to get by, while the economy is growing. That's not good for individual families, but it is also bad for our island culture because it erodes the bonds of ohana and community.

Government can't solve everything but it has an important role to play — and adjusting the minimum wage is the moral responsibility of the state legislature. Let us all pray for the courage and discernment for our elected leaders as the season of horse-trading has begun.

This article originally appeared in the Star Advertiser on April 10, 2013 and is available here: http://www.staradvertiser.com/s?action=login&f=y&id=202245841